PRC-1 · Chapter 2 · Question 100 of 100
The total of the discounts received column in the cash book for May is Rs. 15,000. What is the correct ledger posting for this total?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit Payables Control account, Credit Discounts Received account
Explanation
Discounts received act as income/savings (Credit Discounts Received). They are earned because suppliers reduced the amount the business owes, so it reduces liability (Debit Payables Control account).
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